The House Ways and Means Committee released six years of Donald Trump’s tax returns Friday, after a protracted battle by the former president to prevent that from happening. Trump famously refused to release them during the 2016 presidential election; doing so is not a legal requirement but has long been the norm. The Treasury Department turned over these records to the committee in November.
The committee reviewed Trump’s tax returns primarily from his time in office. Here are three major initial takeaways.
Loans and donations: Trump made repeated large charitable donations and loaned his three adult children either $51,000 or $46,000 for each of the six years covered in the returns.
Donations and loans are tax-deductible, which means they can reduce the amount of total income that can be taxed. But the nonpartisan Joint Committee on Taxation raised concerns that both Trump’s loans and donations should have been subject to taxes. Trump didn’t have taxable income from 2015-2017, meaning any deductions he received for charitable donations or loans would carry forward and be applied in later years. He did have taxable income in 2018 and 2019, so he would benefit from previous deductions.
The taxation committee also raised concerns that the loans to his children were really gifts, which should have been taxed.
Sales: Each year except 2019, Trump listed millions of dollars in cost of goods sold, or the amount spent on getting products to customers, from his corporation DJT Holdings, LLC. The cost of goods sold is tax-deductible, which again would drive down his taxable income at the end of the year.
The returns do not specify which assets DJT Holdings had sold, but IRS audit files indicate that the company appeared to sell residential and hotel units. Real estate holdings are not considered inventory, so costs related to their sale are not eligible for tax deductions.
Losses: In 2016 and 2017, Trump and his wife Melania paid $750 or less in federal income tax. They paid $0 in 2020. Trump paid taxes in the other three years, but at a far lower rate than the average taxpayer. Part of the reason why was because he listed millions of dollars in losses.
He reported a gross negative income of $53.2 million over the six years covered in the tax returns. Tax law allows taxpayers to carry losses over to another year, reducing the amount of taxable income. Trump repeatedly carried over his massive reported losses, dramatically reducing the amount of overall taxes he had to pay each year. Fittingly, Steven M. Rosenthal, a senior fellow in the Urban-Brookings Tax Policy Center, summarized Trump’s tax returns for The Los Angeles Times like so: “He’s a staggering loser.”